Starting a family can be very expensive, protecting even more so. Most young families do not think about what some refer to as the “unthinkable”, one of the breadwinners dying. However, this is a very real thing that should be considered early on, because life or death does happen, often when we least expect it.
Most of us wouldn’t consider driving our cars with out insurance, or putting our children into those cars unless they are in properly constructed and designed car seats. Those car seats are a form of insurance, in the event of an accident you are helping to insure that your child or children are protected from the impact.
Having life insurance is the same thing; it helps protect your family from the financial impact of losing one or even both parents, especially if your family is young. While whole life insurance policies can be cost prohibitive to many young families just starting out, a term life insurance policy can give you a sense of stability for a nominal fee. With varying rates for just about any budget there really is no reason not to have at least one term life insurance policy per adult.
One of the best types to get at this point in your life is a renewable term life insurance policy. This works out really well for families that are not exactly sure of how long they will want one for. What this does is allows you to renew the policy when it expires without having to jump through any insurance hoops to prove that you are insurable. Why is that important? Over the years that you have had the first policy, there may have been changes in your health. It also lets you skip the period of time that the insurance company can contest a claim on a new policy due to a pre-existing condition because it is not “new”, just renewed.
Another plus to a renewable policy is that you sidestep the suicide clause. Most people don’t take out life insurance when they are planning suicide, no matter how many episodes of “Law and Order” you have watched. The normal waiting period on a term life insurance policy for suicide is one to two years, when you renew the policy like the contestability clause, the time period begins when it was initially approved, not the renewal date. Therefore, in the unfortunate incidence of a suicide after the renewal you would be covered.
One down side to a renewable policy is that each time you renew it; your premium will get higher. If you want to choose the least costly option, the annual renewal term policy is your best bet, to begin with. You can also select 5, 10, 20 or even 30 year options.
When you choose a renewable term life insurance policy you want to check into the viability of switching it to whole life somewhere in the future, when your finances are more stable. At this point you will be ready to start investing, and what better way than to invest in your own life, and provide the ultimate protection for your family in your old age.
